I think there is a role for government in changing people's behaviour and there would be a role for the Chancellor Exchequer, indeed I would argue that Gordon Brown should be doing more.

George Osborne

Jon Sopel: Thank you very much for being with us George Osborne, how practical is carbon capture as a long-term solution?

George Osborne: Well I think it's very practical. I'm not a scientist but BP, for example, have done an enormous amount of work on a project that they want to get going off Aberdeen and they think it's practical and indeed elsewhere in the world they're looking at the technology, and of course, not only would carbon capture be good for the UK in terms of reducing our emissions but there are other countries like China which is hugely dependent on carbon generating energy, coal-fired power stations and the like. So if we can develop the technology in Britain, it's also technology we can export elsewhere in the world and make a real difference to climate change.

Jon Sopel: What of the argument that it would blow other renewables out of the water essentially if, you know, if you've got energy companies compelled to by some form of renewables and they're forced to buy that, well then they won't buy wind.

George Osborne: Well I think there's always going to be a place for different types of energy mixes because for security reasons, for low carbon reasons, so of course we want wind technology developed, we want solar technology to develop as well, but we've got to be realistic.

This country, and indeed most of the rest of the world is still highly dependent on fossil fuel burning power stations, and so if you can develop technology like carbon capture, that is going to make a huge difference, and I don't think you should be theological about what exactly the low energy, low carbon energy source you're going to be using for the future should be.

Jon Sopel: So what's the message? We can still drive our fuel guzzling cars, we can go on our foreign holidays because actually there's a technology out there that's going to save us from all this?

George Osborne: Well it's one of the important technologies that will help tackle climate change. I mean it comes at a price, in the sense that you wouldn't have to capture carbon, I mean electricity generated without capturing carbon is obviously cheaper than electricity generated when you do capture carbon, so there is a price there that as consumers we pay, you know, dirty technology may be cheap in the short-term, but I would argue there's a long-term cost and a long-term economic cost which is one of the things that Nicholas Stern's report made very clear.

Jon Sopel: I just wonder whether how much you believe when you.. if you become Chancellor, that it's your job to change people's behaviour?

George Osborne: Well I think there is a role for government in changing people's behaviour and there would be a role for the Chancellor Exchequer, indeed I would argue that Gordon Brown should be doing more, and a good example you mentioned in the package there, green taxation, the amount of tax revenue is taken by green taxes has actually fallen as a proportion of total tax take, and other taxes, like taxes on income, have risen. I think that's the wrong way round. I'd like to shift taxes towards pollution, which is a bad thing, and away from work and investment which is a good thing.

Jon Sopel: What you said the other day, I think that.. I don't know, taxing people on flying is gesture politics, to cut down on people flying.

George Osborne: Well I think.. I'm not sure I said it quite like that.

Jon Sopel: "I don't think you should price people out of the first foreign holiday they can afford. I don't think that kind of gesture politics is what's needed to tackle climate change."

George Osborne: Yes, I don't think pricing people out of their first foreign holiday that they can afford, you know, and so on, is the right thing to do. I mean I think there is a way of taxing aviation and doing something to tackle the environmental damage that aviation does to the environment, but that...

Jon Sopel: But don't we need to fly less?

George Osborne: We do need to look at reducing the growth in demand for aviation, but I would not want to see a tax on aviation whose sole impact would be to stop the lowest income people who fly from flying. There are frequent users of aviation, there are people who fly regularly and as we look at how you might tax aviation in the future, I'm looking at those sorts of things.

Jon Sopel: Well tell me where you are with your thinking about this because that surely has to be the object of policy that we fly less and there are fewer planes in the sky.

George Osborne: Well I think yes, the first thing you've got to try and do is control the growth of aviation, rather than actually cut the number of people flying. The truth is that the immediate challenge is to control the growth of aviation and there are a number of ways of taxing aviation.

You can do it as the Chancellor does with a straightforward tax on a ticket which is not very effective and even the Treasury themselves says is a rather blunt instrument when it comes to the environment, but that makes no dif? makes no differentiation between the efficiency of the engine, whether you're in a plane that is producing less carbon than a plane that is producing more carbon.

It makes no differentiation between whether the plane is half empty or half... or ah... full. It doesn't make any difference.. discrimination between frequent users of aviation and those who have their one foreign holiday that year, their trip to Spain or whatever. And so I think a more sophisticated approach to aviation taxes...

Jon Sopel: How could you single out those people that are frequent fliers and they have to fly a lot and they may say actually the reason I'm flying a lot is because it's my business, and that's contributing towards economic growth?

George Osborne: Well what we're saying is that aviation, like every other sector, should make its contribution, should recognize the external damage that it does to the environment. Just as I'm asking the same of the electricity producing sector, or indeed of businesses, and I'd like to see a carbon levy on businesses.

But the very important point I've made, and a big distinction between myself and if Gordon Brown was sitting here, is that Gordon Brown sees these as extra taxes. I see these as replacement taxes. I'd like to cut taxes elsewhere on people, cut taxes on income and investment, so that we have a strong and healthy economy, but we are directing more of the tax revenues towards um...

Jon Sopel: We're talking about pollution.

George Osborne: Yes.

Jon Sopel: My original question was do you see it as your job to affect people's behaviour, and what you seem to be arguing is well actually no I don't want to affect people's behaviour. I want people to carry on being able to carry on flying, there's some other magical way of doing it.

George Osborne: I do think there's a role for government in affecting behaviour.

Jon Sopel: Do we fly too much and drive too much?

George Osborne: Well I think we need to control the growth of aviation. Aviation is projected to rise dramatically.

Jon Sopel: I'm just asking do you and I fly too much and drive too much? It's a simple question.

George Osborne: Well I don't think it's for a politician to say you shouldn't fly or you shouldn't drive. We should encourage people to use alternatives to driving, public transport, bicycling etc, when they can, but obviously some people.. many people are still going to have to drive and a car is not a luxury for many people.

Equally, if people are making that foreign holiday trip to Spain or whatever, I don't want to say to them: "Don't do that, you can't do that." I don't think that's the right approach to these things, and indeed you would totally lose public support for tackling difficult issues like climate change.

Now if you say: "Let's have a tax structure that encourages airplanes to use more efficient engines, let's have a tax structure that encourages cars to have cleaner engines, let's look at carbon capture so that electricity generated from fossil fuel burning power stations, coal burning power stations, oil burning power stations is cleaner and does less environmental damage, then I think you can combine...

Jon Sopel: And do you think that could do the whole job?

George Osborne:... then I think you can combine economic growth with tackling climate change.

Jon Sopel: And you think that could do the whole job? Because that makes it sound.. you know, I'm sure people watching this will think well fantastic, there's a cost-free option, I don't need to...

George Osborne: These are not cost-free and as I said, carbon capture costs more than electricity produced without carbon capture. There is a cost, but it's a cost.. it's a relatively small cost in terms of the long-term damage. If you take the short-term costs now, you will avoid long-term costs later on.

Jon Sopel: Let's just talk about you as Shadow Chancellor. So far there are no spending commitments, is that broadly correct?

George Osborne: Yes.

Jon Sopel: So why do we keep hearing shadow cabinet ministers coming on and saying well? you know? the Shadow Defence Secretary saying right well we're going to have a better equipped army, we're better resourced and all the rest of it. We had a Shadow Transport Secretary talking about whiz bang new trains, we hear about the Shadow Health Secretary talking about some new expensive diagnostic tests that are needed. That all seems to me to cost money.

George Osborne: Because this isn't? we're talking about money on the front line. Take the Health Service, the health budget has doubled. I mean there is a lot more money going into the Health Service but accident and emergency wards are being shut, maternity wards are being shut and the service on the front line.. nursing jobs are being lost. So we would argue, and the same is true in defence and other areas, that the money is not being delivered to the front line.

So some of the things we would like to see involves removal of some of the inefficiencies, the bureaucracy and so on that is preventing what is a lot of taxpayers' money getting to the front line. And when it comes to spending, of course it's going to be tough. We're in a tough spending environment. Gordon Brown has.. you know.. increased spending dramatically and borrowing is too high and so on, and tax revenues have had to go up.

So in that environment I don't think the Conservative Party's answers to problems is to spend more money, it is to spend money wisely. People have paid their taxes, they want to know where the money is being spent.

Jon Sopel: Okay, not let's just talk about the Leader of the Party and your very close friend David Cameron. Does any of it matter?

George Osborne: Well as he said himself today, people are entitled to a private past before they come into politics, and this issue, by the way, was raised fairly heavily at the time of leadership contest. I chaired his leadership campaign. There was at least a couple of weeks where this was the only issue in town. So...

Jon Sopel: So were you surprised that it didn't come out earlier?

George Osborne: What, this particular...

Jon Sopel: That he was nearly kicked out of Eton.

George Osborne: (laugh) I've not delved into his past, but obviously the people who are writing this book have and they've, you know, unearthed their stories, and I actually don't know the full details of those stories.

Jon Sopel: But it is true then?

George Osborne: Well it's not been denied by David, but he's also said that we are not in the business of saying that politicians can't have a private life before they come into politics, and I thought it was.. you know.. I thought what John Reid said, sitting in this chair a few minutes ago, was very helpful and sensible.

Jon Sopel: Just very briefly, can I ask you what surprises you more, the amount of fuss that it's caused in terms of public opinion or how little fuss it's caused?

George Osborne: I think what's interesting for me is that the public really don't care. I mean almost every survey of public opinion says that actually are not interested. What they want to know is what is a politician going to do about the environment, what we've just been talking about; public expenditure; health; education; law and order and that is actually a healthy thing, that is a healthy sign that the public are interested in what the politicians are going to deliver in the future and not what they've done in the past.

Jon Sopel: George Osborne, thank you very much.

Please note BBC Politics Show must be credited if any part of these transcripts are used.

NB:These transcripts were typed from a recording and not copied from original scripts.

Because of the possibility of mis-hearing and the difficulty, in some cases, of identifying individual speakers, the BBC cannot vouch for their accuracy.

Let us know what you think.

The Politics Show Sunday 11 February 2007 at 12.10 GMT on BBC One.

politicsshow@bbc.co.uk

Our e-mail address

You can reach the programme by e-mail at the usual address or you can use the form below to e-mail the Politics Show.

You will be returned to the Politics Show website after submitting the form.

Send us your comments:

Name:

Your E-mail address:

Country:

Comments:

Disclaimer: The BBC may edit your comments and cannot guarantee that all emails will be published.